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Negative interest rates mean banks are charged to keep money with the central bank, and the policy knocks through the banking system, with charges potentially passed on to everyday savers.

Authorities hope the policy pushes banks to lend cash, while also encouraging people to take their money out of savings and spend - helping to grow the economy.

It also weakens a country's currency, giving exporters an advantage. A stronger currency also helps to raise inflation at home, which is welcomed by central banks that have been battling against deflation over the past year.

But bank profits take a huge hit as it makes it harder to make money out of lending.

And it makes a return for savers even harder - hitting those in retirement hardest.

Critics say if banks are forced to start charging people to keep cash at the bank, many would simply store it at home, rather than spending it.

It's more likely under-pressure firms would look to other ways to charge customers - for instance introducing fees on current accounts - squeezing household budgets.

And experts say the policy can backfire further.

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The European Central Bank dropped rates lower last month

If it's more difficult for savers to get a return, people actually save more cash - rather than less - to make up the difference.

And if more currencies weaken the competitive advantage is lost.

Fears over negative interest rates helped to contribute to market turmoil unleashed at the beginning of the year.

Investors worried profits at major European banks, including Deutsche Bank and Societe Generale, were coming under too much pressure and could lead to finding crisis for the firms.

Critics have raised the alarm over the policy, but central banks making the cuts have ignored concerns, despite signs the negative rates do more harm than good.